<p>garland, at post #27(?) asked whether I thought Wesleyan should pay a tax on its endowment.</p>
<p>It depends. I think Marite brings up a good point in post #45: one factor should be whether the college or university is in a growth cycle with active plans for future use of its endowment.</p>
<p>Wesleyan faced many of these same questions in the early sixties when its endowment was probably worth well in excess of $1 billion in 2008 dollars. It too, was a big employer, paying above-average wages in a blue-collar host city; its presence also had a huge multiplier effect on surrounding communities. Middletown did considerably better than its neighbor, New Haven, to the south in the 1970s thanks, in part, to Wesleyan’s rather astounding growth spurt.</p>
<p>In fact, some critics would argue Wesleyan was spending down its endowment in so doing.</p>
<p>Even now, Wesleyan is spending about 7.5% of the total return on its endowment, which is nearly twice the rate at which Harvard spends its.</p>